Manufacturing Obsession

This is funny. Who knew Eliot Spitzer had a sense of humor?

Bu what is this obsession with manufacturing? People can say that we have a service economy, but I don’t think they fully grasp what that means.

I just bought a deep fryer (at Target) for a remarkable price. What’s really remarkable is thinking through the costs involved. Beside manufacturing, there’s the cost of product design, marketing, distribution, and sales. Not to mention management, accounting, and human resource management. All the people involved in all these activities expect to be paid. My guess is that the cost of manufacturing is the smallest of all the costs, almost incidental to the price of the product. The bulk of the costs are in services.

If you tour a modern high-volume factory, you’ll be amazed at how few people are actually needed. And many of these people are only indirectly involved in manufacturing. Even within the world of manufacturing, a large percentage of the jobs are service jobs. This will be increasingly true as manufacturing technology improves. More and more production lines will be light out operations with no human hands needed.

We are moving towards a world where manufacturing is like agriculture: vitally important but with few people involved. An obsession with manufacturing and manufacturing jobs diverts us from concentrating on the issues which will drive our future economy and prosperity.


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